DeFi Lender Aave to Distribute Lido Staking Rewards on Arbitrum and Optimism
Rewards from staking ether on Lido will now be distributed by Aave on Ethereum, Arbitrum, and Optimism following a recently-concluded community vote.
Aave relies on smart contracts to offer users with financial services such as lending and borrowing. Its recently-released version 3 (v3) product has been deployed on Ethereum and layer 2 networks Optimism and Arbitium – two separate blockchains that allow users to transact on Ethereum-based applications faster and more cheaply.
Last year, Lido said it will reward staked ether (stETH) liquidity providers on Arbitrum and Optimism with a cumulative 150,000 LDO tokens, Lido’s governance token, to attract users to the service.
These rewards will now be distributed across Aave following the vote that ended Monday. Over 99% of all governance participants voted in favor of the proposal.
Lido is a staking solution for Ethereum, Solana and other networks. It is currently the largest decentralized finance (DeFi) application with a locked value of over $8.48 billion as of Tuesday.
It allows users to stake their tokens in return for daily rewards and receive a derivative token that represents the actual staked token – which users can use on other DeFi products.
A key benefit of using Lido is that users can stake any amount of ether and get rewarded, as opposed to becoming a validator on the Ethereum which requires a minimum of 32 ether – worth over $52,000 at press time – before they get any rewards.
Ethereum staking is a way for ether investors to earn a reward by locking up their coins following the Merge event last year. Ethereum’s next major upgrade, expected to occur in March, is the “Shanghai hard fork,” which will allow participants on the network to unlock ether they had staked on the blockchain that has so far been inaccessible.